SaaS Interviews with CEOs, Startups, Founders
An Incubator took 25% But Helped These Co-Founders Merge, Raise Seed, and Hit 3 Paying Customers
02 Dec 2021
Chapter 1: What is the main topic discussed in this episode?
So revenue today is ongoing. So for us, our focus is actually driving more sales in our pipeline. I would say I'm going to be slightly cautious about saying the revenue today, but I'm certainly happy to have a conversation with anyone who might be interested further.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Tanavi Ethanandan.
She's the co-founder and CEO of Data Duopoly, a chartered account from Ernst & Young and a Cambridge University graduate in economics. She takes the lead on the financial and business strategy at the business. They are focused on incentivizing visitors to explore. Tanavi, are you ready to take us to the top? Yes. Okay. What kind of visitors?
Is this for B2B SaaS companies to get their visitors or in-person places to get visitors? Who are you focused on? We're focusing on any venue worldwide. We primarily work with visitor attractions like theme parks, museums and venues. So we worked with absolutely fantastic Eden Project here in the UK, which receives over one million visitors for a pilot test.
And we've now recently launched the National Trust Cornish Tin Coast Partnership, which covers three world heritage mining sites, which is absolutely fantastic to be involved with such an exciting project and directing visitors to the least busy areas. Interesting. So how did you get this idea? Were you working at one of these parks or doing financial analysis on one of them or what?
Actually, the idea came about because me and my co-founder were so tired of getting stuck in queues. Everyone's been there. They've had an exciting day out. They go to the visitor center and see the sign turn left. You end up following the same set of people around the whole site when actually there's loads of space around the site, but you just didn't know.
So we thought, how could we incorporate digital to make the physical experience so much better? Interesting. And who's paying you? Is it the amusement park or the historical national monument directly? Yes. So we charge the venues directly on a SAS contract. What do they pay on average per month? So it really depends on the size of the venue.
So we're looking at around 30,000 pounds or medium-sized venue to even higher depending on the scale. And we're also looking to work with university campuses. Okay. When you say 30,000 pounds or about $37,000 USD, is that monthly or annually? That would be annually. Annually. Okay. And when you say the size of the campus, measured by what? Acres or people or what?
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Chapter 2: What is the focus of Data Duopoly and who are their target visitors?
2019. Okay, very cool. So tell me about your first customer. Who was it and how did you land them? So really, it was the National Trust Tin Coast. They were our first paying client. And we actually had conversations with the project manager early on, and they were really excited what we do. Then COVID hit, and really the whole world went into lockdown, and people couldn't explore at all.
So the world was in desperate need of a chance to go out and explore, but actually understand where the busy areas are and make informed decisions of where to go next. Say that one more time. Your first customer was who? The National Trust Cornish Tin Coast Partnership. What is that? Is that a national site?
Yeah, so it's actually a collection of three world heritage mining sites based down in Cornwall, Giva, Levant, and Botanic. And what it allows people to do is sort of explore the rich heritage of the coastline, seeing how the mining took place. And we direct them around, seeing what the really exciting bits are in the area. Very interesting, because that was your first customer.
How many customers are you serving now today? So at the moment, we're working with them. We've got a really strong sales pipeline. So we're also working with a local company to develop gamified trails. We're also working with university campuses, which is really exciting.
So Falmouth University, our first sort of pilot site, and we're using our same technology to help students and staff navigate around a campus. So I love pilots. I understand the need to do that to drive paying customers. National Trust Partnership was your first customer paying. How many are paying you though today? At the moment, those are the only ones. And we've got a strong... Two or three?
Three at the moment. Okay. Got it. Three. So this is great. So how did you guys survive COVID? I mean, you have to deal with cutting expenses. I mean, that's a big deal. So we were actually really early on. So we only incorporated in October 2019. So we were a team of two, myself and my co-founder, Erin Morris. So we kept ourselves really lean. We bootstrapped the company.
We sort of took trains, slept in very dubious Airbnbs when we went to trade shows in London, the works. But really, we then managed to secure our first seed round of a quarter of a million pounds.
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Chapter 3: How did the co-founders come up with the idea for their business?
And that's when it changed. And we did that during COVID. And the real reason for that was we secured our first paying client during then. But actually, more importantly, there was actually a big need. People suddenly realized they need to understand where their visitors are on site, knowing that they've just sold a million tickets for a day isn't enough.
They need to know actually where are people on site. And that's where we can really help. So we managed to get backing from the European Space Agency for our seed round. Also another organization in aerospace and some fantastic angel investors.
And that enabled us to grow our team from two to six and very shortly becoming seven, which really has ramped up our sales pipeline and our sort of development capabilities, which has been hugely exciting. How much equity did you have to sell to raise the $275,000? Yeah. So for us, we had to give about 10% equity away. But I would like to say we came from an incubator beforehand.
So they had a stake in the business at the very starting point. I see. So the pre-seed folks took about 10%. How much did the incubator take? So they took a lot more. It was 24.9% at the beginning. Okay. And who was that incubator? So that's actually Launchpad, and they're based down in Cornwall. And really, they were the people that brought Erin and myself together.
So they took us as individuals with no business idea, and they gave us a year and funded us for a master's in entrepreneurship and said, can you start up a business? How much capital did they give you, if any? So they didn't give us capital per se, but they gave support and expertise. But really, it was down to Erin and myself to do the hard work.
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Chapter 4: Who pays for the service, and what does the pricing structure look like?
And that's where we've got to today. So Tanavi, you and Aaron own 65% today and the incubator has 25% and the pre-seed is 10%. Exactly. About 66% between Aaron and myself. Do you guys care about valuation right now, specifically your valuation? Do you think you might raise soon or sell a portion of the company?
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Again, both plural founderpath.com forward slash products forward slash valuations. You're growing today. The team is six people. How are you thinking about burn? I mean, can you self fund off customer revenue yet? So at the moment for us, actually, we are using our seed money. But for us, we're quite lean. We don't pay for office space. We've sort of adapted to the hybrid working.
We've got some free office space at the moment in Cornwall, which is fantastic. It means we can meet once a week. But actually, we work with a developer in the Philippines, which keeps our costs really low. And he's absolutely fantastic and integral part of the team. How'd you find him? Amazing. And I think COVID taught us that we can actually... How did you find him? Oh, sorry.
I thought you meant how we find him with how it goes. How we found him was we were advertising the role. He applied and we went through an interview process. Where did you advertise though? On LinkedIn, on AngelList, the usual sort of hotspots, but it actually came through a direct connection. Very interesting. So he's developing. Can I ask what you pay him per month? Yeah, you can do.
So for us, we sort of do about Ā£2,000 a month. But that is for specific project costs. I see. Interesting. Okay, so six people now today. What do the six people do? So we have a variety. So myself, I take sort of the business and financial side of things. My co-founder is an award-winning film director, so she actually takes the lead on the product design and the UI and UX.
We have a sort of lead developer based in the Philippines, which is fantastic, a full-stack developer. We also have two underground developers at the moment here in Cornwall, one sort of a mid-level developer sort of taking charge on the back-end side of things, And then we also have more on the app side, front-end development, a junior developer. And we have a sales and marketing lead.
And the new team member, hopefully joining us later this month, is a junior marketing assistant, willing to ramp up that sales cycle. So how much are you guys burning per month right now? So at the moment, it's not too bad. We sort of have about a runway in the bank account, probably for around another eight to nine months, actually. Okay. Okay. That's pretty good. So what's the plan then?
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Chapter 5: What key challenges did they face in securing their first customers?
You're doing about $9,000, $10,000 a month in revenue? Potentially. But really for us, it's actually driving that future sales pipeline and actually obtaining the data because I think the data insights are really powerful for us. Well, yeah. I mean, every startup wants to get more sales. So this statement isn't helpful. I'm trying to get a sense of how you've executed so far.
So I mean, are all three of those customers actually paying customers or are some of them still on a pilot? So they're all paying customers. They are. Okay, that's great. Well, congratulations. That's a big step to go from nothing to three paying, especially in your space during COVID. So nice work there. That's fantastic. Thank you. How do you get your next 100 customers?
Is it going to trade shows? Is it ad something else? Yes, and I think that's a challenge for everyone. But for us, we are actually talking to as many people as possible and using our existing clients as case studies. And I think that's really powerful to see the value we can give to them.
So actually showcasing that we can understand visitors dwell time and actually say, did you know that if you know that the visitor is spending more time here, they can actually increase the concession we spend on site. That's really powerful. And using incentives to drive them away from the busy areas.
So what's quite unique, it's very easy to sort of say, OK, great, there's a big crowd congregating in this area. But what can I do about it? If we can say we can connect to a few visitors and say, do you want to get a half price coffee at the quiet cafe over there? Or equally, if you're at a zoo that the penguin talk at 3 p.m. is really busy, but 5 p.m. is looking quite quiet.
So why don't you get a half price ice cream right now? That's really powerful and can drive an increase in sales. So I think that's really where one of our USPs are. What's the average visitor to the National Trust Partnership mining sites spend per day or per visit on concessions? So at the moment, it's been quite a quiet time because now it's winter.
And as you can imagine, it's quite rainy and windy. So we don't actually know how much necessary they spend, but we can definitely see how much footfall we're changing. Does that mean that they churn during slow times when they're closed? Sorry, could you repeat the question? Does that mean they cancel, they stop paying you during slow times when they're closed?
No, we charge on a 12-month base contract. So it means it doesn't matter how many visitors are using it. We want to encourage as many people as possible to keep using the platform.
Yeah, but if someone's paying you for 250,000 visits a year, but COVID or rain or storms or hurricanes or snow, whatever, only means they have 5,000 users per year, they're going to feel like they're paying you for something they're not getting. So how do you manage churn? Oh, no.
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